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ABI denies ‘agenda’ as FCA sets out scope of closed book inquiry

The Association of British Insurers denied it is pushing an “agenda” to weaken the FCA as the regulator revealed the scope of an inquiry into how it announced its closed book review.

Last month, the Daily Telegraph reported that the FCA was to examine exit charges as part of a review of closed book policies. Insurers’ share prices plummeted in the six hours before the regulator released a clarification statement on the scope of the review.

In the wake of the report, the ABI has written to the FCA and Chancellor George Osborne to raise concerns about the regulator’s handling of the announcement.

At a Treasury select committee hearing on the Budget this week, MPs questioned whether there was a strategy to put political pressure on the regulator. 

ABI director general Otto Thoresen said: “There is no other agenda. The letters sent to the Chancellor and the FCA chair talked about learning lessons.

“The biggest challenge on the Friday morning was that, unlike with any other announcement, we did not have a press release or report with which we could compare what was being said. It was very difficult to give people confidence.”

He added: “The experience we had at this particular period has not been helpful. We need to learn from certain aspects of it.”

Thoresen’s comments came as the FCA revealed details of an independent inquiry into how it announced its closed book probe. 

Clifford Chance senior commercial litigation partner Simon Davis has been appointed to carry out the investigation, which will examine why and with whose authorisation the closed book briefing was given to one journalist.

It will also look at whether the briefing went further than the agreed line and why the FCA took so long to issue its clarification statement.

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